The Albanese government has partially reversed its decision to exclude some critics of its new tax bill from a parliamentary inquiry in Sydney next week, following backlash over the short consultation period and the handling of submissions. The bill proposes major changes to capital gains tax and negative gearing, prompting concern from industry bodies, tax experts, investors and MPs across the political spectrum.
After criticism that the inquiry process was too rushed and selective, Labor issued invitations on Friday to several high-profile opponents of the reforms. Wilson Asset Management’s Geoff Wilson, who supports changes to capital gains tax on housing but opposes applying them to other assets, was among those newly invited. He said the process had been heading towards “a total whitewash” until media scrutiny forced a change, but still described the inquiry as rushed and inadequate.
However, the government has continued to exclude other key critics, including former Treasury assistant secretary for tax Geoff Francis and the peak financial services body. Francis, a taxation policy expert, said he remained sidelined while supporters of the government’s position were allowed to appear. He argued that if the government was confident in the policy, it should be willing to hear opposing views, especially given Treasury’s capacity to test and challenge criticism. He called the reforms an “ill-thought-out revenue grab” and warned against major tax settings being changed according to political whims.
Independent WA MP Kate Chaney was among those criticising the process. She said, “25 days is not enough time to do full justice to legislation of this significance”, reflecting broader concern that such major changes require deeper scrutiny and wider consultation. The Centre for Independent Studies also urged that the bill be put on hold pending an independent review conducted at arm’s length from government.
The inquiry has now received more than 150 submissions, a sharp rise from just 11 the previous day. Organisations that submitted views include the Australian Shareholders Association, the Tax Institute, the Australian Investment Council, Vanguard Australia, Ashurst Australia, Pitcher Partners, the Property Council of Australia, Master Builders and the Housing Industry Association.
Chaney also raised specific policy concerns about the scope of the capital gains tax changes. She urged the government to limit CGT indexation to residential housing while keeping current discount settings for other asset classes. She said, “The committee should recommend that any carve-out or alternative treatment for early stage, high-growth businesses be in this legislation, not promised for a later amending bill”. Her comments suggest concern that the bill could harm innovation and investment if protections for start-ups and high-growth businesses are delayed or left uncertain.
Chaney further argued that the government needed to index tax brackets “as part of any comprehensive tax reform package”, pointing to a broader view that tax reform should be coherent rather than piecemeal.
Criticism of the bill also came from other directions. The Australian Council of Social Service argued negative gearing changes should not be grandfathered, saying the current approach would delay reform and preserve advantages for existing investors. Meanwhile, Entrepreneurial & Small Business Women Australia warned the bill could undermine gender equality by reducing after-tax returns for female founders selling businesses, and called for concessional treatment and a Treasury gender impact assessment before the bill proceeds.